The latest tidbits on Sun deals and product news

November  1997
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Encore shareholders angered recent purchace by Sun

San Francisco (Nov. 26, 1997) -- This week Sun Microsystems Inc. announced that it had completed the purchase of Encore Computer Corp.'s storage products business at a price of $185 million, but Encore shareholders unhappy with the deal have now filed for a judicial review of the Sun transaction.

The Encore shareholders hope the courts will order a second vote. They are critical of Encore's vote on the transaction, held November 24.

Matt Miller, a lawyer for the shareholders says, "We think there were several irregularities here. A lot of shareholders didn't get their proxy materials in time, or didn't get them at all."

Miller continued, "We also believe the company has disseminated a lot of misleading information concerning the transaction and otherwise. Given the totality of the circumstances there are some very big big problems with the proxy vote."

Sun shrugged of shareholders claims that the Nov. 24 vote could be rulled nul and void. according tO Mark Davis, a Sun Microsystems spokesperson,"Any concerns [the shareholders] have are between the shareholder and Encore. The transaction is complete. The part of Encore we bought is now Sun Property."

According to the terms of the transaction, Encore's storage business will become part of Sun's Enterprise Server and Storage Group -- a group led by vice president and general manager John Shoemaker. Sales and service personnel from Encore will be integrated into Sun's operations, according to Sun.

Bob Collings, a common shareholder of Encore, says that the agreement was first to be an OEM with Sun. "That OEM agreement degenerated, from our perspective, into a sale of assets," says Collings.

"Our feeling is that this wasn't a good deal that Gould negotiated with Sun because they basically lost the OEM agreement. And then they came home with only half a pie and then decided not to share it with anybody else," he says.

Shareholders unhappy with the deal struck by Encore Computer Corp.'s board of directors to sell the company's storage business to Sun have filed a lawsuit against Encore's parent company, Gould Electronics, Inc.

"We're not real pleased with the proposed transaction," said Collings."We feel that the way its been dealt with has involved some massive conflict of interest," he says. "People on the Encore Board voted for salary, severence pay and insentive bonuses -- voting for themselves -- which you never have happen in a public company. There are just a lot of things that just don't smell right with the whole transaction."

Encore's mainframe and open systems connectivity, data sharing and business continuance products -- including the Infinity SP40 storage server and the DataShare mainframe/open systems sharing product -- will be added to Sun's existing line of scaleable enterprise storage and server systems, officials said. Sun is hoping the acquisition will boost its presence in the open storage market.

--Stephanie Steenbergen, SunWorld Magazine

Sun completes acquisition of Encore's storage business

San Francisco (November 24, 1997) -- Sun Microsystems Inc. has completed the purchase of Encore Computer Corp.'s storage products business at a price of $185 million, the companies announced today.

Encore's shareholders approved the merger today, paving the way for it to go forward. Effective immediately, Encore's storage business will become part of Sun's Enterprise Server and Storage Group -- a group led by vice president and general manager John Shoemaker. Sales and service personnel from Encore will be integrated into Sun's operations, Sun said in a statement.

Encore's mainframe and open systems connectivity, data sharing and business continuance products -- including the Infinity SP40 storage server and the DataShare mainframe/open systems sharing product -- will be added to Sun's existing line of scaleable enterprise storage and server systems, officials said. Sun is hoping the acquisition will boost its presence in the open storage market.

--Elinor Mills, IDG News Service, San Francisco Bureau

Comdex: Java -- are developers using or refusing?

Las Vegas (November 20, 1997) -- Sun Microsystems Inc.'s differences with Microsoft Corp. over Java may have made a few developers hesitant to use the language for much beyond Web applications, but Java still whipped up enthusiastic chatter at Comdex -- from keynote speakers down to attendees wandering the show floor.

Sun's JavaSoft division was absent from Comdex, but Toshiba Information Systems was here to unveil the fruit of its investment in the language -- its new Java-based operating system, JexeOS. In the first quarter of next year, Toshiba's software arm will release its 32-bit operating system, which works either on the network or from a standalone PC.

And Lucent Technologies Inc. unwrapped its Inferno 2.0 network operating system for small consumer devices. The new version of Inferno runs applications written in the PersonalJava programming language -- a subset of Java designed for network products that have displays but no keyboards such as screen phones.

Operating systems aside, IBM, Borland International Inc., Lotus Development Corp., Symantec Corp., and Microsoft were all here to show off tools for developers -- who are putting varying degrees of trust in Java.

Anthony Bata, software engineer at Pena Systems Inc., believes Java has potential, but Sun's lawsuit against Microsoft has made him cautious. Bata, who develops middleware, is sticking to creating applets until he is sure that Java is here to stay.

But Roger Slayden, a programmer with the U.S. Air Force in Las Vegas who has just acquired Microsoft's J++ to update his Web site is among the ranks of the show attendees unperturbed by the Microsoft-Sun battle. The dispute between Microsoft and Sun will not affect Java programmers, according to Vivek Khadilkar, systems analyst at Image-X Co. in Goleta, CA "because Sun will not stop coming out with newer versions."

Michael Larosa, a systems trainer who was manning the Microsoft Visual J++ development tool booth, also noted that the dispute between Sun and Microsoft has made some developers at the show a little uneasy. But he added that doubts are not great enough to quash interest, with companies seeing Java as a means to develop faster solutions and components. But even if developers view Java as a "cool" language, Larosa claimed that they have yet to move on to creating high-end system software with Java.

Java is finding a place in server side development at Pacific Bell Interactive Media in Pasadena, CA, according to Salim Walji, director of technical development.

"It works for us," said Walji. And although he said his group is not really exploiting Java's multiplatform capabilities -- the company is currently using it to develop applications for just Solaris and Windows NT -- Walji likes Java's object model which he said eases the development of distributed multithreaded applications.

And the language had some advocates milling around Comdex who are seeking to escape the clutches of Microsoft.

Kevin Hartwick, a PC specialist with Interstate/Johnson Lane, a brokerage firm in Charlotte, NC, said his company is currently evaluating Sun's JavaStations as desktop alternatives to PCs as a way to cut down on support and administration costs.

"One of our corporate visions is to really get away from Microsoft in general, if that's possible," he said. "We are only a 1,200-user firm, and our support contract for Windows software alone is $250,000."

(Elizabeth Heichler contributed to this story.)

--Joanne Taaffe and Elinor Mills, IDG News Service

Sun, OpenTV to jointly develop set-top boxes

Las Vegas (November 19, 1997) -- Sun Microsystems Inc. today announced plans to work with OpenTV Inc. to jointly develop set-top box reference designs based on the OpenTV operating system and Sun's microSPARC and JavaChip processors.

OpenTV, an interactive television software company jointly owned by pay-TV company Myriad International Holdings, Thomson Multimedia and Sun, will work with Sun to develop its next-generation set-top box operating system, officials said. Together, the two companies will develop multiple reference designs for satellite, cable and high-definition television (HDTV) devices and will build in support for digital TV channels and other interactive services, officials said. The OpenTV-Sun boxes will not only offer Internet access, but also home banking, interactive programming guides, educational programs, community services and home shopping, officials said.

The two companies also plan to make the OpenTV operating system for microSPARC and JavaChip processors support Java so that Java developers can create applications that run on the platforms, officials said. In addition, by developing an OpenTV operating system for the two processors, OpenTV will be able to build in electronic commerce solutions that rely on Sun's database and commerce servers, officials said.

Plans for the first products based on the joint reference designs were not announced.

--Kristi Essick, IDG News Service, London Bureau


Encore shareholders file suit against parent company

San Jose, CA (November 18, 1997) -- Shareholders unhappy with the deal struck by Encore Computer Corp.'s board of directors to sell the company's storage business to Sun Microsystems, Inc. have filed a lawsuit against Encore's parent company, Gould Electronics, Inc.

The suit names Gould and four members of Encore's board of directors as defendants.

Matt Miller, an associate with the Boston law firm Berman DeValerio & Pease says that a derivative action and class action lawsuit was filed this afternoon in the New Castle County, Delaware Court of the Chancellery. According to Miller, the lawsuit asks the Court to prevent the funds of the transaction from being transferred to Gould and seeks unspecified damages for Encore's shareholders.

Sun signed a definitive agreement last July to acquire Encore's storage business in July of this year and has already begun work integrating Encore's high-end line of Infinity SP storage products into its product line.

According to documents filed with the SEC (Securities and Exchange Commission), once debts and restructuring costs are paid, Encore expects to realize $7.1 million in net proceeds from the $185 million transaction.

According to Bob Collings, an Encore shareholder, "what we wanted was an OEM [original equipment manufacturer] deal with Sun, but Gould negotiated the deal and now is taking the vast majority of the benefits." Collings says that personally, he would be satisfied if Gould used the proceeds to buy back the approximately 30 million shares of common stock it does not own at $2 per share -- the price Encore stock was trading at last May. Encore's stock is currently trading in the 20 cent range.

On November 24th, Encore's shareholders are to vote on whether or not to approve the Sun transaction -- a vote that some shareholders have threatened to reject if a better deal is not struck with Gould.

The lawsuit seems designed to put further pressure on Gould, which owns close to 50 percent of the voting stock in Encore, to change the terms of its agreement with Sun. Says Miller, "I think the ideal would be for the deal to be renegotiated."

According to Mike Kahn, chairman of the analyst firm, the Clipper Group, "the lawsuit is more of an insurance policy in case the vote goes through."

Sources within Sun say the company feels that dissident Encore shareholders do not have the 25 percent vote they would need to stop the acquisition from going through.

According to SEC filings, Sun has stated that it will not pursue the Encore technology in any way if the deal is rejected by Encore shareholders.

When contacted by SunWorld, a Sun spokesperson claimed, "our position is in the [SEC] proxy."

Gould Electronics had no comment on the lawsuit.

--Robert McMillan, SunWorld



Sun wants Microsoft barred from using Java logo

Boston (November 18, 1997)-- Sun Microsystems Inc. today sought a court order to bar Microsoft Corp. from using Sun's Java Compatible logo with Microsoft's Internet Explorer 4.0 browser.

Sun made the request of the U.S. District Court in San Jose, California where it last month filed suit against Microsoft for a range of issues related to Microsoft's licensing and implementation of its Java technology. Chiefly, Sun claims that the technology has been "improperly modified by Microsoft and fails to pass Sun's compatibility tests," according to a statement.

"With this motion today we are making a simple demand: because these Microsoft products do not pass Sun's compatibility tests and are not compatible with Sun's published standards for the Java technology -- Microsoft must be stopped from using the Java Compatible Logo to deceive the marketplace," Morris said in a statement released today.

Sun also said that two independent technical experts have confirmed that IE 4.0 fails the Sun Java compatibility test suite, according to Sun.

--Elizabeth Heichler, IDG News Service, Boston Bureau

McNealy the only high-tech CEO to show at Nader's Microsoft event

San Francisco (November 14, 1997) -- Staunch defender of consumer equity, Ralph Nader, hosted a conference this week in Washington D.C., entitled "Appraising Microsoft and its Global Strategy." Sun Microsystems Inc.'s CEO Scott McNealy was keynote speaker for the event.

Nader sent a letter to Microsoft's CEO, Bill Gates, inviting him to attend. Company officials had not had much to say publicly about the conference until Bob Herbold, Microsoft executive vice president and chief operating officer, blasted Nader for arranging the conference. A conference where, "virtually all of the speakers...are either litigation opponents, leading competitors or well-known Microsoft critics."

Herbold's letter argues that Microsoft is not anticompetitive, but that in fact, information technology companies, including Sun, have shown they can compete nicely. Nader's conference simply plays into the hands of companies that have enlisted the government in order to compete with Microsoft, the letter says.

Herbold continues, "When companies complain about the vigor of competition, that is typically a sign that they are having difficulty keeping up with the pace of innovation or remaining profitable in the face of declining prices," he said. "That doesn't mean, however, that consumers are suffering. Nor does it imply that other companies have in any way misbehaved."

Nader responded to Herbold's letter: "Microsoft doth protest too much, and too late. Microsoft CEO Bill Gates was invited to this conference months ago, and we have repeatedly urged Microsoft to participate in the conference." Nader continues, "It is unfortunate that Microsoft did decline the invitations, because the conference would have been enriched by Microsoft's participation."

Instead of participating in the conference, Nader says Microsoft has, "mistakenly, determined that its narrow mercantile interests are best served by denegating -- and inaccurately at that -- a genuine effort to facilitate a debate over some of the central issues of our time."

Scott McNealy engaged in what is arguably his favorite pastime: blasting Microsoft. He used his position as keynote speaker to advocate the Java programming language as the way to keep the computer industry alive and kicking.

"Do you find it strange that I am the only CEO of a high-tech company here today?" McNealy questioned. "That's because all the others, including IBM, are reselling Microsoft's products. I guess if I were them I would not show up today either, because it might only serve to be bad for my shareholders," he said.

--Stephanie Steenbergen & Nancy Weil. Nancy Weil is a correspondent with the IDG News Service, a SunWorld affiliate.

U.S. ISO committee rejects Sun's Java gatekeeper bid

San Francisco (October 28, 1997) -- The U.S. delegation to the International Standards Organization (ISO) today voted against Sun Microsystems Inc.'s proposal to become the official gatekeeper of Java, officials at Sun said today.

Representatives of ISO's U.S. Technical Advisory Group (U.S. TAG) meeting in Redmond, WA, today voted against Sun's application to become a "Publicly Available Specification Submitter" (PAS), the entity in charge of maintenance of the Java specifications. PAS status has mostly been awarded to independent industry consortia and organizations, but ISO rules don't preclude a for-profit company from becoming a PAS.

Obtaining PAS status is the first hurdle Sun has in order to submit the Java specifications to the ISO in an effort to get it sanctioned as an official standard, Sun officials said.

The U.S. vote is one of 27 votes that are being tallied by the ISO before a Nov. 14 deadline. To date, Australia, Denmark, France, Hungary, Sweden, and the U.K. have approved Sun's application. Once all votes are in ISO will decide if there is a consensus either for or against Sun's proposal to be declared a PAS.

Sun officials did not know what rules will be followed if a consensus is reached, and ISO officials were still meeting late today.

If a consensus of ISO members approves Sun's application, Sun will become a Submitter of Publicly Available Specifications and could submit Java platform specifications for review as an international standard, officials at Sun said.

Under Sun's proposal the Java platform -- which includes the Java Virtual Machine, the Java language specifications and the APIs for Java class libraries -- would become an ISO approved standard.

Sun was not happy with the U.S.'s vote.

"We are definitely disappointed in the U.S. vote," said George Paolini, director of corporate marketing at Sun's JavaSoft division. "But we remain cautiously optimistic about the process. There are still 20 other nations that have to vote."

Other countries which will vote on Sun's application in the next two weeks include Australia, Austria, Belgium, Brazil, Canada, Czech Republic, Finland, Germany, India, Ireland, Italy, Japan, South Korea, The Netherlands, New Zealand, Norway, Romania, Russia, Slovenia, and Switzerland.

During the second quarter, in a preliminary evaluation of Sun's application, the U.S. TAG cast a vote of "no, with comments," to request further information from Sun, which was provided by the company. Today the U.S. TAG decided not to reconsider Sun's proposal which leaves the original "no" vote in place, Sun officials said.

At the end of September Sun responded to the concerns of the U.S. TAG and other ISO members raised during a first round of votes in July.

Also in September Microsoft Corp., Compaq Computer Corp., Digital Equipment Corp. and Intel Corp. sent an open letter to Sun asking the company to turn over ownership of its Java development language to an international standards body, and give up the rights to the Java trademark. Sun rejected the letter as a pure public relations stunt.

Sun maintains that Java is already a de facto industry standard for writing cross-platform applications and that development of the specifications has been an open process involving the entire industry.

In addition, Sun's desire to get ISO approval for Java is driven by customers who need and want to buy ISO approved products, officials said.

If Sun loses the ISO vote the company will maintain the same open process for developing Java technology, which involves input from various other vendors and the developer community as a whole, Sun officials have previously said.

--Torsten Busse, IDG News Service


Sun adds servers to Netra line

Boston (October 28, 1997) -- Sun Microsystems Inc. today added to its Netra server line two servers that are targeted at users operating in congested network environments.

The Netra NFS 1.2 can handle Gigabit Ethernet, automatic status monitoring, and RAID 5 or RAID 0+1 storage, Sun officials said. In addition, it contains a Smart Recover feature, designed to let the server reboot a 319 gigabyte system in less that 10 minutes without affecting performance, and a File Snapshot feature, which lets users recover previous versions of files without assistance from a system administrator.

The Netra NFS 1.2 is available now, and pricing starts at $15,995, officials said.

The second server announced today, the Netra t 1100, is the first system in a new line designed to meet the environmental and storage requirements of the telecommunications industry, officials said.

The Netra t 1100 delivers front-end processing for interactive voice response, network element management, call data record-handling, data mediation and computer telephony, officials said. The system uses an UltraSPARC processor and meets telecommunications industry requirements, including Zone 4 earthquake operation, 55 degrees Celsius operation, and U.S. and European safety and emission standards.

The Netra t 1100 will be available worldwide before the end of the year, and pricing begins at $16,995.

--Rebecca Sykes, IDG News Service


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